Armed terrorists with explosives strapped to their bodies stormed a Russian school in a region bordering Chechnya (search) on Wednesday, corralling hundreds of hostages — many of them children — into a gymnasium and threatening to blow up the building if surrounding Russian troops attacked.

Casualty reports varied widely. At least two people were confirmed killed, including a school parent, but an official in the command operation said on condition of anonymity early Thursday that 16 people were killed — 12 inside the school, two who died in a hospital and two others whose bodies still lay outside and could not be removed because of gunfire. The official said 13 were wounded.

Camouflage-clad special forces carrying assault rifles encircled Middle School No. 1 in the North Ossetian town of Beslan (search). Earlier, a little girl in a flowered dress fled the school holding a soldier's hand; officials said about a dozen other people managed to escape by hiding in a boiler room.

A militant sniper took position on a top floor of the three-story school, and hours into the standoff Russian security officials used a phone number they were given and began negotiations with the hostage-takers — widely believed linked to Chechen rebels suspected in a string of deadly attacks that appeared connected with last Sunday's presidential election in the war-ravaged republic.

More than 1,000 people, including many distraught parents, crowded outside police cordons demanding information and accusing the government of failing to protect their children.

"I've been here all day, waiting for anything," said Svetlana Tskayeva, whose grown daughter and three grandchildren aged 10, 6 and six months were among the captives. "They're not telling us anything. ..."It's awful, it's frightening."

The hostage-taking came less than 24 hours after a bombing outside a Moscow (search) subway station that killed at least nine people, and just over a week after near-simultaneous explosions blamed on terrorism caused two Russian planes to crash, killing all 90 people on board.

With violence spreading across the country, many Russians worry about their safety. Official talk of increasing security after terrorist attacks is dismissed by many, and while tight measures were put in place in North Ossetia after the hostage crisis, few signs of major changes have been visible elsewhere.

The recent bloodshed is a blow to President Vladimir Putin (search), who pledged five years ago to crush Chechnya's rebels but instead has seen the insurgents increasingly strike civilian targets beyond the republic's borders.

"In essence, war has been declared on us, where the enemy is unseen and there is no front," Defense Minister Sergei Ivanov told reporters before the hostage-taking.

Putin for the second time in a week interrupted his working holiday in the Black Sea resort of Sochi and returned to Moscow to deal with the unfolding crisis.

President Bush called Putin and "condemned the taking of hostages and the other terrorists attacks in Russia," White House spokeswoman Claire Buchan said. Bush offered "assistance" to Russia in dealing with the crisis if requested, but no request had been made so far, the White House said.

After an emergency session called for by Russia, the United Nations Security Council condemned "the heinous terrorist act" and demanded the immediate and unconditional release of all hostages.

From inside the school, the terrorists sent out a list of demands and threatened that if police intervened, they would kill 50 children for every hostage-taker killed and 20 children for every hostage-taker injured, Kazbek Dzantiyev, head of the North Ossetia region's Interior Ministry, was quoted as telling the ITAR-Tass news agency.

Sporadic gunfire and explosions could be heard throughout the standoff. One girl lay wounded on the school grounds, but emergency workers could not approach because the area was coming under fire, said regional Emergency Situations Minister Boris Dzgoyev.

There were other conflicting casualty reports.

ITAR-Tass, citing local hospitals, said one person died at the scene and seven in hospitals. Dzgoyev put the death toll at four, and the Federal Security Service chief for North Ossetia, Valery Andreyev, later said two civilians were killed — including a school parent — and two wounded.

Emergency officials and doctors said 11 people were wounded, and a doctor told NTV television that two of them were in grave condition. Two bodies were visible outside the school, and there were reports that one attacker was killed.

The crisis began after a ceremony marking the first day of Russia's school year, when students often accompanied by parents arrive with flowers for their new teachers. The school covers grades 1-11, but Dzgoyev said that most of the children taken hostage were under 14 years old.

Shortly after 9 a.m., the attackers drove up in a covered truck similar to those used for military transport. Gunfire broke out, and at least three teachers and two police were wounded, said Alexei Polyansky, a police spokesman for southern Russia.

Most of the hostages were herded into the school gym, but others — primarily children — were ordered to stand at the windows, he said. He said most of the terrorists were wearing bomb belts.

At least 12 children and one adult managed to escape after hiding in the building's boiler room during the raid, said Ruslan Ayamov, spokesman for North Ossetia's Interior Ministry. Media reports suggested that as many as 50 other children fled in the chaos as the attackers were the raiding the school.

"I was standing near the gates — music was playing — when I saw three armed people running with guns. At first I though it was a joke, when they fired in the air and we fled," a teenage witness, Zarubek Tsumartov, said on Russian television.

Hours after the seizure, the terrorists sent out a blank videotape, a message saying "Wait" and a note with a cell phone number, Russian officials and media said. Andreyev, the federal security official, said "for a long time we could not make contact" with the attackers, but that authorities reached them by phone and that "negotiations are being held now."

Andreyev said there might be 120-300 captives, while an official at the Emergency Situations Ministry branch for southern Russia said authorities believed the number was 336. Earlier, officials had said up to 400 people were taken captive.

"The main task is to free the children alive — and everybody located there, but the most important thing is the children," he said. He said the hostage-takers had refused offers of food and water.

Lev Dzugayev, an aide to North Ossetia's president, said brief contact with the captors indicated they were treating the children "more or less acceptably" and were holding them separately from the adults.

Dzugayev said the attackers might be from Chechnya or another neighboring region, Ingushetia; relations between Ingush and Ossetians have been tense since an armed conflict in 1992. But in Washington, a U.S. official speaking on condition of anonymity said the hostage-takers were believed to be Chechen rebels.

A representative of Aslan Mashkhadov, a rebel leader elected president of Chechnya in 1997, denied involvement in a statement on a separatist Web site.

Earlier, the school attackers demanded talks with regional officials and a well-known pediatrician, Leonid Roshal, who aided hostages during the deadly seizure of a Moscow theater in 2002, Polyansky said. Andreyev later said Roshal was contacting the captors.

They also demanded the release of fighters detained over a series of attacks on police facilities in Ingushetia in June, ITAR-Tass reported, citing regional officials.

Parents of the seized children videotaped an appeal to Putin, urging him to fulfill the terrorists' demands, said Fatima Khabolova, a spokeswoman for the regional parliament.

"We pray to God that this may end without bloodshed," said Marina Dzhibilova, whose two sons were inside. Distraught, she was supported by her sisters.